Many people have heard this saying: American parents wait for their children to become adults at the age of 18, and they don't care about them, and they need to work to earn the cost of going to college, and they also need to save the down payment for buying a house, and it is even more impossible to help bring their grandchildren!
Facts, is that really the case?
A recent study in the United States found that nearly half of American parents are still sponsoring adult children due to the increasing cost of food and living.
01
An average of 10,000 yuan per month for children
The study, conducted by Savings Network, found that young Americans have not benefited substantially from the country's economic recovery, as shown by the so-called "high commissions, declining inflation, and economic growth." Many young people need to seek financial assistance from their parents for their lives.
The study shows that the average age of adults receiving parental financial assistance is 22 years old, and retirement insurance is also affected. While parents surveyed generally said they wanted their children to become financially independent by the age of 25, many parents would sponsor their children even after this stage.
Twenty-one percent of sponsored parents have children who are millennials (28-43 years old) or Generation X (44-59 years old). Millennials and Gen Xers receive an average of US$907 to US$960 (RMB6,572 to RMB6,956) per month from their parents.
Gen Z (ages 18 to 27) receive more funding from their parents, averaging about US$1,515 (RMB10,978) per month.
It's worth mentioning that many Gen Zers are required to pay for college.
Of the three generations, parental financial assistance is most commonly used to pay groceries, food, cell phone bills, rent, mortgage, tuition, and health insurance.
Younger generations are also more heavily loaned than they used to be, while wages (adjusted for inflation) are lower.
Roberto, 60, from Santa Cruz, Calif., will give his adult son $2,000 (14,491 yuan) every month starting in the summer of 2023 to help him live.
"My son, who is 29 years old and has a bachelor's degree in mathematics, attended a three-month intensive data analysis bootcamp 10 months ago at a cost of US$15,000 (108,600 yuan)," he said. He had been hoping to find a job that matched his abilities, but so far he has not found one. He and his wife rented a small studio, and the money I gave was about enough to cover the rent. I've been funding him like this for the past seven or eight months. ”
Many parents say their children's aging has worsened their financial situation and their prospects are bleak.
Some parents say their children are old because of unemployment, health, drug addiction, and some because of a broken relationship with their partner.
While some parents say they are only sponsoring their children temporarily to help them tide over the difficult times, and they are only paying for their children's cars, health insurance or housing in a lump sum, others say it is a semi-permanent arrangement because their adult children will not survive.
Roberto said his son worked a variety of jobs after college, including as a postman.
"The biggest obstacle for my son to find a job is that he doesn't have relevant work experience, and professional jobs usually require two years of work experience," he said. ”
"He could have found a job in a supermarket (like Trader Joe's), but it wasn't his ideal job, it didn't fit his education and training experience, and those jobs were low-paying. I don't want him to compromise. Fortunately, I was able to sponsor him, otherwise he would have been under more pressure to find a job. But to be honest, there aren't many jobs he can do around here. Nearby Silicon Valley has laid off a lot of people lately, and he's going to have to compete with a lot of people who have years of work experience.
"Maybe my son didn't do the right thing, but in my opinion, a lot of people who are qualified are turned away because of this."
02
The homeless generation?
The survey found that due to the soaring cost of living such as food and housing, more and more adult children in the United States are either active or forced to live with their parents. The outlook for the cost of living in the United States remains bleak.
The U.S. Department of Agriculture said the price of all food in the U.S. will rise by nearly 3 percent. Purchases at supermarkets and grocery stores are expected to increase by 1.6%.
At the same time, demand for affordable housing remains in short supply. In the U.S., even if an adult can afford to buy a home, record-high interest rates can put them off.
According to the Mortgage Bankers Association, the average interest rate on a 30-year fixed-rate mortgage was close to 8% in October 2023, the highest in more than 20 years.
Although interest rates have since fallen, for many people the decline has not been enough, as house prices have also risen. The average age of homebuyers in 2023 is 49 years old, and homebuyers will only get older in the future.
According to a recent "Thought Leadership & Future Practices" survey conducted by Harris Poll among renters of all ages in the U.S., including Gen Z, Millennials, Gen Xers and Baby Boomers, 61% of renters said they were worried about never having their home, with some saying their current rent was already unaffordable and "almost uninhabitable."
The study also said that 61 percent of adults who live with their parents neither pay rent nor bear any household expenses.
Allen, a 68-year-old retired lawyer from Minnesota, like others, claims he sponsors his children because he has extra money.
"We helped our daughter make a down payment of US$100,000 (724,700 yuan) on the house and lent her US$450,000 (3.26 million yuan) at a 3% interest rate, which is half of the remaining mortgage, so that her mortgage will be a little less stressful," Allen said. ”
"We paid for the kids in college, so they didn't have a student loan to pay. We don't need money and my wife and I are very frugal. ”
Allen said that although he is financially well-off, he is worried about whether he and his wife are doing the right thing, because his daughter and her partner have a combined annual salary of about 150,000-170,000 US dollars (1.0869 million to 1.2319 million yuan), and the income is not bad.
"I don't understand the spending and saving habits of the younger generation," he said. My daughter and partner both have high-paying jobs but never seem to have extra money. They always go out for coffee, go out to eat, spend money on this, spend money on that. ”
"In contrast, frugality has made our old age very comfortable. My daughters want to be independent, but I'm worried that they will run out of savings in their old age. ”
"We want them to be healthy, strong and happy, but as parents, we don't necessarily know how to do that. We don't know if we're helping them or hurting them. We feel uneasy. ”
03
The Great Pension Crisis
But sponsoring an adult child can also affect a parent's retirement savings.
According to Savings.com research, working parents contribute 2.4 times more per month to their adult children than their retirement accounts.
The average amount that parents give to their adult children is US$1,384 (10,028 yuan) per month, and the average amount they contribute to their retirement account is US$609 (4,413 yuan) per month.
A 64-year-old father and small business owner from the Northwest Territories, who spoke on condition of anonymity, said he and his wife were sponsoring several adult children.
"There's a daughter who has a huge credit card debt and we're helping her pay it off," he said. ”
In 2023, she has a debt of US$24,000 (173,900 yuan). She is 29 years old, married, and has one child. She now works in a nursery for $18 (130 yuan) an hour. Her husband is responsible for earning money to support his family while also working part-time.
"We usually help take care of their son and give them food once or twice a week. In the past six months, we have helped them pay off their debts by an average of US$700 (5,072 yuan) per month, and we are now helping them find a house with a lower rent. ”
"Another daughter is recently divorced and is raising a grandchild. We supported her financially by letting her drive one of our cars, which we insured and paid for the tolls. She now works two jobs and runs a small business. ”
He said the other two children live at home and, thankfully, they don't need cash assistance.
"All of this really stresses us down. Now that the economy is sluggish, our small business is barely sustaining. Every child's savings are gone, and we need to withdraw money from our pension to live. ”
04
"Am I going to be homeless one day?"
The researchers concluded that "the U.S. economy is facing significant challenges right now."
"U.S. adults receive assistance from their parents in their 20s, 30s, and even older because of a mixed set of socioeconomic impressions," the study said. ”
"It's easy for some people to evaluate this, but the simple answer is that young Americans are too idle these days, and parents give them financial assistance so that they can become more independent adults." It's also comforting for parents who are tired of sponsoring their children.
But clearly, economic factors (such as rising housing costs) and structural woes are not taken into account.
Natalie, a 35-year-old freelance ghostwriter and mother of two, from Portland, Oregon, and several others have said they received financial assistance from their elderly parents.
She said that for more than a year, her mother has supported her about US$1,000 (7,246 yuan) a month.
"My writing income is about the same as my husband's salary as a full-time teacher, and my family earns about US$70,000 (507,300 yuan) a year, but we can't make ends meet. Despite my efforts, I had to turn to my retired mother for help. She said.
"With a monthly rent of US$2,200 (15,943 yuan), medical insurance of US$900 (6,522 yuan) per month, and the preschool tuition for one of our children has risen to US$750 (5,434 yuan) per month, more than US$1,000 (7,246 yuan) in utility bills, as well as daily food expenses, we are dying poor at the end of each month."
Natalie said her mother worked as an emergency room nurse for decades before retiring at the age of 62. However, she now wants to re-enter the workforce to support three of her five adult children, all of whom are in their thirties and forties.
"We all live in high-spending areas, and my mother is willing to support us financially as she sees her savings dwindling. My mother's help to us is endless, and now her savings are also very tight. She was always looking for a transcription job she could do at home, which made us sad. Natalie explains, "We have weekly family meetings to talk about how to give her back. ”
"Every day I feel like I'm a failure, but with only 24 hours in a day, I don't know what else I can do. My day starts at 6 a.m. and ends at 1 a.m. ”
For the past six months, Natalie and her husband have donated blood twice a week in exchange for cash, so they can earn an extra US$450 (3,261 yuan) a month.
"For a few days after donating blood, you're going to be really tired, you might have a fever, shivering, chills, whatever," Natalie said. ”
"We discuss at least once a month whether to move to Portugal or to France, where my sister lives, to a place where there is really socialized health care and free childcare, which is what we value most at the moment."
"Looking at my children, I felt very irresponsible to give birth to them. Looking at my mother, I blamed myself for her heartache. ”
"Whenever I drop my son off at kindergarten and pass by the tents of homeless people in their thirties, I think to myself, 'One day, will I do the same?' ”